Loveland's development fee plan stalls ... partly

Loveland city councilors go halfway in raising CEFs

Runners of a yearlong, multi-stage marathon toward the goal of establishing fees developers pay for civic improvements hit the finish line Tuesday night.

But Loveland city councilors collectively put one foot over the line -- and stopped.

Four study sessions during the past 10 months have been devoted to setting levels for capital expansion fees, those that real estate developers pay to fund parks, public buildings, police and fire equipment and other big-ticket expenses.

A fully constituted council, with ninth member Dave Clark seated after a brief swearing-in ceremony that opened the meeting, voted 8-1 to adopt the new fees for residential projects but freeze those now in place for commercial and industrial developments.

"We've just come out of a huge recession, or are coming out of it," said Clark, elected to his post Nov. 6. "People are struggling out there. I have personal experience with it."

The developers' share

Capital expansion fees paid by developers for streets, parks, public buildings and equipment will rise slightly for single-family homes, fall for apartments and remain as is for commercial projects next year. Here is how they will apply:

Single family homes, per home:

2012: $12,531

2013: $12,939

Multi-family residential, per unit: 2012: $11,869

2013: $9,006

Commercial projects, per square foot:

2012: $1.15

2013, proposed but not approved: $1.95

Clark's construction business was a casualty of the recession that flattened the real estate development sector beginning in late 2008.

"If I had my way, I'd freeze these until we can take a closer look at them."

The biggest target for critics of the new fee proposal, put forth by Loveland fiscal adviser Alan Krcmarick after getting direction from councilors throughout the year, was its provision for increases in fees charged to industrial project builders.

"We want job makers to come in here, and we're talking about fees rising sixty-nine-and-a-half percent?" councilor Daryle Klassen asked. "I do not see a motion here that I can support."

Councilors agreed to modest increases on fees assessed for single-family homes, and a slight reduction in those applied to apartments that are currently the second-highest among 12 Colorado Front Range communities that KrcMarick used as comparisons for his fee study.

But they held the line in supporting a proposal, with councilor Joan Shaffer dissenting, to keep the fees for retail, office and industrial building projects as they are through 2013.

Councilors heard from Loveland resident Jim Welker, who said his efforts to develop a small parcel of land had been stymied by annexation costs and capital expansion fees.

"These fees are so onerous," he said. "I don't know why you don't look at sales tax. I thought that's how cities should pay for services."

Councilor John Fogle raised concerns about how fees are inequitably applied, with partial waivers granted to some developers while others pay the full freight.

"How in the world do we get off this merry-go-round?" he asked. "As these industries come into Loveland, I'm not sure we're sending the right message."

Clark said the 26-year history of the capital expansion fee system that the city relies on has allowed councilors to fund city projects without voter approval, creating "a perception in the community" that citizens have less control.

"The fact is, cities can approve these fees without having to go to the voters," Clark said. "Fees are something that we can just keep raising and raising and raising."